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I think it's an innovative idea, but speaking form just a tiny bit of personal experience, buying and selling pieces of companies (excluding the stock market) c
by sgrove 18y ago
I think it's an innovative idea, but speaking form just a tiny bit of personal experience, buying and selling pieces of companies (excluding the stock market) can be terribly confusing. Am I buying 10% for my $20,000? Then why is it, one year later (and more stock has been issued/other investors have come in), I have less than 10%?
It could be possible, and thinking about it, it's might even be largely educational for people who became interested in it. But getting people up to speed on the procedures and terminology may be initially difficult.
- anamax 18y ago> Then why is it, one year later (and more stock has been issued/other investors have come in), I have less than 10%? Because other stock has been issued. Companies can sell "new stock" or "old stock". Selling new stock dillutes. Selling old stock doesn't. Suppose that you own 20 out of 200 shares. If the company sells 100 of those 200 shares, you still own 10% because the number of shares hasn't changed. If the company creates 100 and sells new shares, you now own 6.66% because the number of shares has changed to 300.
- sgrove 18y agoI was using the question to illustrate a point, but thank you for that wonderful explanation :) I simply meant to point out that there are things that are not immediately obvious to people who are not actively involved in this area, and it may take several dozen well-written paragraphs such as yours to bring people up to speed.